14 How to Extend into a New Brand Segment - Michelle Smallwood from Holiday Builders Jun 24 2020

[00:00:00]Greg Bray: Hello everybody, and welcome back to another exciting episode of the Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine. 

Kevin Weitzel: I'm Kevin Weitzel from Outhouse, 

Greg Bray: and we are excited today to be joined by Michelle Smallwood. Michelle is the vice president of sales and marketing for Holiday Builders.

Welcome, Michelle. 

Michelle Smallwood: Thanks, Greg. I'm glad to be here. 

Greg Bray: Oh, we appreciate your time and we're excited to learn more about you and about Holiday Builders today. So why don't we just dive right in? Give us a little introduction about who is Michelle? 

Michelle Smallwood: Um, let's [00:01:00] see. Michelle Smallwood lives in Orlando, Florida, so I commute a long way to Melbourne every day.

Um, Fridays, my office day. So as you can see him working at my home office, um. I've been in home building, um, for 13 years, uh, with Holiday Builders. And I kind of took the circuitous route to get to homebuilding. I started my career out of college at a company called Dun and Bradstreet, and as a business analyst, I talked to all different kinds of businesses and my first foray into anything construction and homebuilding.

Was learning about what tuckpointing is and if anybody listening has anything to do with a building with brick, you know, tuckpointing is when you have to fill in the mortar that has fallen out in an old brick building. [00:02:00] Um, and so that was kind of my first introduction to it. I found that really interesting and just kind of took the circuitous route.

Got here, was, um. working internationally for several years as a consultant for in the credit card industry and, um, got a phone call when I was in Switzerland and it was in the middle of the night there. And the rest is history. Here I am. 

Kevin Weitzel: Now two things. One, what was your favorite country? This is a personal question. Favorite country that you went to, either with work or personal. 

Michelle Smallwood: Hmm.

And 

Kevin Weitzel: I got a follow up to.

Michelle Smallwood: You know, I lived in my family and I lived in Scotland for a couple of years during my international stint, and I would have to say Scotland just because it feels like a second home. 

Aye. That's awesome. And two Holiday Builders is actually an interesting builder because they're not just your typical corporate builder or, you know, private family-owned.

Tell me about Holiday Builders and what [00:03:00] differentiates them. Holiday is a 100% employee-owned. We were the first company or not company, but the employee-owned builder in the country. Um, and every employee has stock in what we do and how we do it. It doesn't mean we, uh, rule by committee, but it means that everybody feels pretty passionate about what we do and how we do it.

And we take, you know, customer service and customer satisfaction. Very seriously. 

Kevin Weitzel: So there's that extreme buying at every level of customer service at every level of making sure things are done right. 

Michelle Smallwood: Yeah.

Kevin Weitzel: That's awesome. 

Greg Bray: So I have to say when, when I hear employee-owned, I can just see somebody in the back of the room going. I object. I'm an owner. You can't do that. So I'm glad you clarified it a little bit. It's not quite how it works.

So Michelle, tell us a little more about, um, Holiday Builders [00:04:00] kind of from a product and market standpoint. Where do you guys build kind of, what do you target from a home buyer standpoint. 

Michelle Smallwood: Holiday has been around 37 years.

uh, you know, weathered that really ugly period. We don't even like to talk about it anymore. and we started out as a first time home buyer builder. Um, when Holiday started interest rates for mortgages, we're what we can't even understand right now. They were like 17, 18%. But yes, our first homes, was kind of a box, but it filled a need. It was 39,900, and it 18 or 19% interest. That's like a credit, you know, it's like a credit card, interest rate. So, um, our. Owners at the time wanted to create a home that people could buy. The people could afford to buy at that time, [00:05:00] at that interest rate.

So that's where we started. We morphed into, um, building all different kinds of products to meet all different price points. Well, I wouldn't say we ever went into luxury, but we went into first time home buyer, move up, um, second move up. Almost during the downturn, we were very, very flexible. We didn't ever want to call it semi-custom, but we were really flexible with what we offered and what we would do to sell a home.

Um, about two years ago, uh, we have a strategy planning meeting once a year, and about two, two sessions ago, we talked about the need for affordable housing, that it was coming faster than anybody was really adapting to it. And we went back to, we said, we're going to go back to our roots, and we started a new division [00:06:00] called HB value homes.

And right now that's making up about half of what we sell. We use the same products that we use for our other homes. Um. We just really value-engineered the exterior, you know, to line up the plumbing and line up the walls and those kinds of things. Um, that didn't affect the quality of the home.

And we're able to deliver homes that are pretty affordable prices. So that makes up about half of our, um, product lineup right now and our sales. And then the rest is, uh, we have a couple of active adult communities, 55 plus, and the rest are, you know, first, second time, first time, move-up home buyer, a second-time move-up, and then a few, you know, downsizing.

Greg Bray: Michelle tell, tell us a little bit about the decision there to go with a whole different kind of [00:07:00] brand line with the HP value homes. You know, I'm sure there was a lot of discussions. Do we, do we stay with the main Holiday Builders? Do we need another name? What, how did you work through that decision?

Michelle Smallwood: There was a lot of discussions and a lot of opinions, you know, everybody felt going back to our roots was really near and dear to everybody's heart. And when we decided we needed to differentiate, it was really more, how do we keep what we have. And make it known that we're doing something we haven't done in a long time, which is that entry-level, new home buyer home.

Kevin Weitzel: So on your marketing efforts, do you change your, your Avenue of approach and your, uh, what you use as a litmus to determine how you're going to spend your marketing dollars to one division or the other? 

Michelle Smallwood: Yes and no. We look at our marketing plan kind of holistically [00:08:00] and, um, we're probably spending now 70 to 75% of our whole budget is on digital something. Um, whether it's pay per click or Facebook ads or whatever. Um, and the rest of it is, are on a few print ads. Um. We also have some billboards, but the billboards are really specifically directional billboards. I'm not, we don't do branding billboards anymore. We used to, but we don't do them anymore because we just find that directional boards help people find you, branding boards, not so much. 

Kevin Weitzel: I agree. So there's not a different, uh, philosophy, if you will, for your HB product, um, as far as how you channel, how you advertise? 

Michelle Smallwood: I would say if anything, we're more digital because it's that first time home buyer. So we don't [00:09:00] have any billboards. Uh, we don't have any print ads that are specific to HB value homes.

Because typically that buyer is the one who's exclusively shopping online. 

Kevin Weitzel: Oh yeah. Well, let me ask you, this is just another little followup. It's only because I've got the squirrel and head mentality and I have to pop it in there. I've got to ask it on your HP product, are you having, um, are you noticing this is mostly millennials, you know, that, that first time true for some buyer or are the active adults and the, you know, baby boomers, if you will, competing for that same home.

Michelle Smallwood: They are, we were shocked, honestly, when we planned this, we said, first time home buyer, a younger buyer, you know, younger demographic, all of those things. And then we launched, it was March of last year. We launched in one location in Port St Lucie, Florida. And. We found that it was the young buyer, but we also found [00:10:00] that it was Mr. and Mrs. Smallwood coming down from Michigan, who wanted a cost-effective small home they could buy as a second home and they would just be able to lock up and walk out the door and go back to Michigan for the summer.

So we've got kind of this breadth of customers that we weren't initially expecting. And it's been shocking and great all at the same time because everybody's buying those homes because of the affordability and the quality. 

Greg Bray: No, that's, that's terrific. So I can imagine then that, that you did that research, you had kind of planned out your target, and now you've discovered there's a different market.

Um, what type of changes did that generate and kind of your messaging and process there? 

Michelle Smallwood: It changed um, in some instances how our ads looked, you know, cause initially when you're, you're doing a lifestyle image, who are you getting, you think you're capturing [00:11:00] the buyer that you're going to see? So it started out honestly, as more a younger buyer.

And now it encompasses younger buyers, older buyers, families, um, you know, single people, kind of everybody. we have kind of added some additional targeting on our Facebook ads. Um, we find Facebook to be a very effective tool for us. Um, and we've kind of retargeted those things based on the buyers we see coming in as opposed to the buyers that we thought were going to be coming in.

Greg Bray: Interesting. No, that's, that's awesome. So tell us a little bit more about your team. You know, you've mentioned a lot of digital work, you know, Facebook and things. Do you have those folks inhouse? Do you outsource that?

 Michelle Smallwood: Greg, we do a little bit of both. Um, Holiday Builders has historically had a pretty lean marketing team.

[00:12:00] Um, so I have a couple of experts inhouse. And we also outsource, um, my team manages our, um, pay-per-click in house. Um, cause I've got an expert at that. And, so we're very lucky to have her. I'm a video expert on my team as well. So, and, you know, Photoshop and all of that. Um. So we do some of that in house.

We outsource our, um, social media, uh, because that person is equally good at that. It, what we found is when, when we're outsourcing, we have to provide that company a lot, a lot, a lot of information so they understand who we are and make it feel like we are putting that ad or that post out there as opposed to someone is posting on our behalf.

Greg Bray: So, so when you say we've got this expert in house, for example, for your, [00:13:00] for your paid search, was that a decision of we want this inhouse so we're going to go find that expert, or Hey, this person that we, that we have and we know has the skills, so we're going to take advantage of it because they're already on the team.

Michelle Smallwood:  We started out looking for that person and we were able to find somebody who had the skill set we were looking for, and they took some additional educational courses at Google and, um, have developed that skill over time. We had been outsourcing it, um, and didn't find that to be hugely effective, um, based on what we were doing and we developed our in internal resource and that's worked out really well for us. 

Greg Bray: No, that's terrific. That's terrific. So, Michelle D, do you oversee both the marketing team and the sales team, or how do you guys structure that responsibility? 

Michelle Smallwood: I am VP of sales and marketing, the sales [00:14:00] team, the sales managers and the salespeople actually report to the area directors or the regional president. Um, and all have dotted line to me. Um, I'm the corporate governance. I'm the resource that they come to when they need sales help, um, or if they need training or anything like that. But because our area directors are responsible for their margins. They like having control of that. Ultimately having control of that resource that can so affect their margin.

Greg Bray: And the reason I asked that is so often you see that title of sales and marketing together, but yet there's a lot of difference in the skills and the needs and, and expectations that go with those two groups. And I'm always curious about, can one person really be the leader for both, you know, and how does that work out?

So, so, thanks for sharing that. Um, [00:15:00] so, um, tell us a little bit about that bad time that you didn't, you alluded to before. And some of the lessons that you learned back in, you know, 2007 2008 and cause I'd like to kind of see maybe if some of those lessons apply today as well. But what did you learn back in 2008? 

Michelle Smallwood: Probably one of the most important lessons is following up. And I know that is such an old for everybody, but follow up is the key because back then as well as in the last 60 days if you're actually seeing someone, they're really a buyer and if you don't follow up with them, someone else is going to follow up with them and they're going to sell them a house. So it may as well be us rather than somebody else. I mean, that and flexibility. 

Kevin Weitzel: You know, it's actually funny you say that because when times are good, you know, we tend to get [00:16:00] lazy with our sales practices and techniques and proven best practices. But, uh, when times get lean, that's when you find out who your rockstars are because they're looking at there, you know, they're looking six months back, a year back, they're looking at the things that were categorized as D leads, you know, they're going after those two.

So I, I applaud you guys for recognizing that for sure. 

Michelle Smallwood: We definitely, um, we're kind of combing what's in our backlog, what's in our backlog, because people, they did stop coming to the model. I mean, our models were closed. Well, they were, the doors were locked. We were home. If someone made an appointment, we would invite them in.

But it wasn't like it was in January. Where would the doors are open and you might have five or six parties walking through at the same time. Um, that just was not how it's played out the last two months. So you needed to hold those people in the palms of your hands, like they were a [00:17:00] baby bird, and nurture them all the way through and remind them who you are and why they came to see you.

Greg Bray: So Michelle, what, what differences do you see between what's happening now and kind of the 2008 challenges? 

Michelle Smallwood: I would say the biggest difference is just the whole financing scene. Now in the last 60 days, the underwriting rules certainly have changed some. But we went, you know, in 2006 from that Willy nilly, um, no docs loans to very, very rigid to now we have a little more breathing space and underwriting rules have changed some, but there are still availability of obtaining mortgages and I, and the fact that our rates are lower. I mean, we keep saying historic lows and that that is the case. 

[00:18:00] Greg Bray: I mean, what, what would you do if it was 18% interest right now? Like you were talking about? I mean, that's just crazy to even think about and we complained about three and a half. What are you talking about? Three and a half. 

I don't want to know.

Michelle Smallwood:  Right, exactly.

Greg Bray: How have things in general, kind of in your market been over the last little while with the virus challenges over the last couple of months? Are you seeing kind of some, some steadiness, um, you know, crash and burn, you know, business as usual?

Michelle Smallwood:  We are very fortunate, there has been no crash and burn.

Um, we build. Uh, all the way from the Florida panhandle and the very Eastern edge of Alabama, Coastal Alabama down, um, kind of both coast of Florida. We go down to Cape Coral on the West coast in Port Saint Lucy on the East coast, and. We were busy, busy, busy with foot traffic, and [00:19:00] leads. And then probably the third week in March, it dropped off a lot, which made everyone, you know, taking that breath of oh gal here at comes.

And so we had a couple of weeks where it was quiet. Then the salespeople were sending out video emails and reminding those people, those C and D prospects and B prospects, Hey, I'm still here. Remember me? This is why Holiday Builders, I can help you over the phone or on your computer or on your phone.

I can do a walkthrough of a model home or a walkthrough of one of our moving ready homes and that kind of shifted everybody's perspective from, I have to come and I have to see and I have to be there [00:20:00] too. Maybe I really can buy a home with this person walking me through and me stopping them and saying, hey, show me that bathroom again.

Show me the, you know, the shower or whatever. And maybe I can buy a home that way. So we went from not doing that at all to kind of, it felt slow, but really it happened in the last six weeks or so that we went from not doing that, to doing that too now. I think we've changed the way people are going to buy homes.

I think for every builder, everywhere for the foreseeable future. I think this is now going to be our norm of, it's a mix between in face, you know, face to face in person, videos and actual, you know, live virtual walkthroughs. And I, and I think that's, that is our new way of doing [00:21:00] business. 

Greg Bray: And do you see a benefit to that? Not just from a, Hey, I'm scared that I want to go outside and be around other people, but, but you've got, um, uh, customer audiences that are far away anyway because they're relocating, you know, from. Those cold Northern places to sunny Florida and they can't get to the model conveniently.

What impact do you see there? 

Michelle Smallwood: I think it's, I, it's opened up some unbelievable opportunities for all of us. Really. We sold a house to people in California. I mean all the way across the country. They've never been to one of our models. Um, they weren't able to travel because they were locked down and we were locked down.

And they got comfortable enough with the products that we use and seeing enough of our model homes and our move-in ready homes that they contracted with us. We [00:22:00] sold one from someone in the Northeast the same way, and that's in the last week. Um, so I think it affords those buyers who used to say, well, I'm going to be coming from California in October.

 And you can scoop up those buyers now and it's good for them and great for us. 

Greg Bray: No, that's awesome. Those are some great studies. How challenging has it been for kind of the sales and marketing team to wrap their heads around that new reality? 

Michelle Smallwood: I'll tell you.

Um, the state of Florida was Mmm. At, under a stay at home order for five weeks, I think. I believe in Orlando and Orlando was on. For a little longer than the rest of the state, so I'm not positive. But, during that time, my team laughed because everyone said, Oh, are you glad to be, you know, you're off PTO now.

And they worked like a madwoman [00:23:00] for the entire time because you have not only the regular flyers and promotions and things that they ordinarily do with ads and all of those things. Well now, all of a sudden you're changing everything. So everything that was in the bag and done had to be redone, um, to say, we can also do this virtually.

We can do, uh, um, new help, buyer workshop virtually. You don't have to come to our model. So all of that collateral had to change. The ads had to change. Everybody's perspective had to change. We had to get different marketing material out to each location to say, you know, it was funny. We started out saying, you know, we're practicing safe distancing, and we're cleaning and we're this, we're that.

Well, by the end of the month, everyone was like, don't even talk about that anymore. Everyone knows you're doing that. Have a mask if you want a [00:24:00] mask and let's just kind of get on with it. It will stay safely apart and everyone knows the drill. So it went from lots of explanation at the beginning of the month to everybody knows that they've heard it on the news, they heard it on the radio anytime they get in the car or whatever and let's bypass that.

And just demonstrate that we're operating safely. Uh, we, our models still aren't flooded with people. We're requesting appointments and all of that. And, um, you know, so the market, the marketing team had to be really fluid, and that's just kinda how it is. And I think, you know, if there's a wave two of this, it's going to be more of the same, but less stressful because now we all know the drill.

Greg Bray: For sure. So knowing, knowing what you know now about that drill, what do you wish you had done like last year, you know, or, or kind [00:25:00] of to prepare? I mean, there's no way we could have known exactly what was going to happen here,  but I'm sure there are some things you look back and go, Oh, I meant to do this and Oh, if we only had.

Michelle Smallwood:  Absolutely Greg, okay so we started this, um, locking our doors. And someone said, well, you know, we really need to promote our Matterport tours. And I said, Hmm, yeah, we have a handful of those. And those were more tests. Um, and we, you know, the reality was we kind of dedicated budget elsewhere and we didn't spend, um, the time that we probably, or the money we should have dedicated to that at that time.

So, um, my hope is over the next,  you know, several months that we are able to, um, beef up our Matterport tour library so that we've got more to show. We have a lot of virtual tours [00:26:00] with still photos. We have some video tours, but I really think Matterport really helps those people in the Northeast and in California, and we had a buyer from Alaska that it really helps them kind of walk the space themselves.

So that's my thing is if we can get more Matterport tours. That's my plan and my recommendation to everybody is if you don't have that, do something like that as, as much of it as you can within your budget. 

Kevin Weitzel: And I have to let Kevin speak now. 

No, no, no. I'm just in my head, you know, cause me, it's the whole squirrel thing.

Uh, when you said somebody moved from Alaska to Florida, I'm like, you can't get any farther away from a customer than that. I mean, what are you gonna do? Sell to somebody in Siberia next? That's crazy. I'd love to hear their story. So what made you want to move from Alaska to Florida?

Michelle Smallwood: Hours of sunshine a day? 

Kevin Weitzel: True true.

Greg Bray: So [00:27:00] Michelle, um, we're getting a little close to our time here. So just a couple more things like the kind of, um, check-in with ya, um, for, for those that are, you know, want to be like you when they grow up, you know, and, and become a, a VP of sales and marketing, what, what are some resources you would recommend to them?

Uh, you know, for them to learn from and, and ways to kind of keep up with what's going on in industry outside of the home builder digital marketing podcast. Of course, 

Michelle Smallwood: Um, I spend a lot of time looking at our industry experts. They are out talking to all kinds of builders. I mean, the Jeff Shores, the Kerry Mulcrone, Myers Barnes, the Meredith Oliver's who are kind of all over the place.

Um. You know, Matt Riley there, they're all talking to lots of different builders. And the reality is everybody's got a little something that they do that's better than somebody else, or [00:28:00] that can be customized to your personal needs as a company and make, take you from really good to great. And so I have been, I mean, in the last six weeks, I've spent every Tuesday evening on Meredith Oliver's home builder town hall.

Um, she's got great guests and, um, just there's just so much knowledge in this handful of people. I can't recommend for people enough to tap those industry experts. Look at, you know, if you've never been to IBS. Look at who the speakers are at IBS. I mean, Blue Tangerine is a great example too. 

Greg Bray: Oh well, thank you!

Michelle Smallwood: I mean, you guys are great experts on that whole digital side, the website side, and all of those things, are huge contributors to helping us all understand our industry better.

[00:29:00] And again, outhouse and, and the services they provide. Same thing. So my whole thing is don't try to reinvent the wheel when all these people have done such amazing things. So really tap into their expertise. And I have found our industry's really happy to share information. Um, so, you know, utilize it.

Greg Bray: Awesome. Well, thank you. We'll have to make sure we tag all those folks when we release this so they know that they got a little shout out from Michelle there, so that's terrific. 

Well as we kind of wrap up, do you have one last piece of advice that you'd like to share with those who are listening today?

Michelle Smallwood: Be flexible. Flexibility is the key. We all have to be flexible and teachable. That's the, you know, in this crazy time really. I mean, whole building's kind of crazy as it is. It's exciting and it's fun and I love our industry, but it can be crazy at times and being [00:30:00] flexible and not. Having that perspective of well, we've always done it this way.

makes all the difference because we are in an ever-changing ebb and flow. And if you can kind of roll with that, instead of being rigid, you'll be successful. 

Greg Bray: Great advice. Great advice. So if somebody wants to, uh, connect with you, you know, reach out and learn a little bit more, what's the best way for them to talk to you.

Michelle Smallwood: Um, they can either reach me on, um, our email at msmallwood@holidaybuilders.com, or I'm happy to have anybody call me on my mobile number  (321) 427-5700 

Greg Bray: Awesome. Well, thanks for sharing, Michelle. It's been a lot of great information today and it's always great to see how people are doing it on the day to day basis. You know, sometimes, uh, our folks that are kind of a step back, don't really know how some of those nitty-gritty decisions are [00:31:00] made. So we really appreciate you sharing today.

Michelle Smallwood: Thanks. I appreciate you having me on. 

Greg Bray: I'm Greg Bray from Blue Tangerine, 

Kevin Weitzel: and I'm Kevin Weitzel from Outhouse thank you.